UPDATE: California Coastal Communities announced this morning that it will appeal the move to delist it from the Nasdaq.

The developer states in a news release:

“ The company has requested an oral hearing to appeal the proposed delisting, and its common stock will remain listed on the Nasdaq Stock Market pending the outcome of the hearing.”

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The developer of  the 356-home Brightwater housing project overlooking the Bolsa Chica wetlands in Huntington Beach says it is deciding whether to fight a recommendation by the Nasdaq staff to delist it from the stock exchange on Friday following its filing for Chapter 11 bankruptcy.

California Coastal Communities Inc., based in Irvine, announced last week that it filed for Chapter 11 to gain more time to repay $182 million in debt due by next spring.

The company said in papers filed with the Securities and Exchange Commission Tuesday:

“The delisting determination letter … advised the company that trading of its common stock will be suspended at the opening of business on November 6, 2009 unless it requests a hearing before a Nasdaq Listing Qualifications Hearing Panel to appeal the proposed delisting. The company is evaluating whether to request a hearing with the panel to appeal the proposed delisting, or to not appeal the Staff’s decision and allow its common stock to be delisted.

“If  the common stock is delisted, the company expects that it will not be immediately eligible to trade over the [Over the Counter] Bulletin Board or in the “Pink Sheets,” however, the common stock may become eligible for such trading if a market maker makes application to quote the common stock in accordance with Securities and Exchange Commission Rule 15c2-11, and such application is cleared.”

It’s typical for a stock exchange to threaten delisting when there is a bankruptcy.

The Chapter 11 doesn’t appear to have hurt the company’s stock. California Coastal Communities closed trading Tuesday at 93 cents, up 3 cents. Its high in the past 52 weeks was $2.07; low for the same period was 39 cents.

But a stock’s price typically goes down following a delisting because it becomes harder to trade.

California Coastal has said it expects no interruption in its daily operations and will continue to build and sell homes.

Related news:

• Bolsa Chica developer files for bankruptcy
• Brightwater builder skips more loan payments
• Cash-strapped builder: Green homes project still a go
• Brightwater developer misses $1.7 million payment
• O.C. builder can’t make $57 million in debt payments
• Homes on the Bolsa Chica horizon
• Housing project breaks ground at Bolsa Chica

For more on the growing wave of defaults among homebuilders and commercial real estate investors, CLICK HERE!